Printer Friendly


 GOLDEN, Colo., Sept. 10 /PRNewswire/ -- Horizon Resources Corp. today announced sales of $32,341,403 and a net loss of $25,230,672, or $6.40 per share, for the year ended March 31, 1993.
 The net loss resulted primarily from the failure of Horizon's potash business, which had been acquired in February 1992 from AMAX Inc. During the quarter ended March 31, 1993, an unexpected major unfavorable change in market conditions in the potash industry occurred, caused principally by (i) the shipment of large quantities of low-priced potash from the former Soviet Union into major markets served by Horizon's potash subsidiary, Horizon Potash Corp. and (ii) unfavorable weather conditions in the central United States that delayed spring planting. The result was that selling prices that could be realized for potash were suddenly reduced to substantially less than Horizon's cost of producing potash. The suddenness, duration, and severity of this market decline resulted in the inability of Horizon's potash subsidiary to fund its operating expenses and to pay its trade and other creditors when due. Horizon did not have the financial resources to fund the cash flow requirements of the potash business and in April 1993, Horizon discontinued operations of the potash subsidiary, without the expectation of recommencing operations.
 The net loss included reserves totaling $9,295,941, representing the write-off of the potash mining property of $2,337,778, a reserve for future estimated net costs of the potash mining operation of $2,400,000, and an additional provision of $4,548,163 for reclamation costs at the potash mining property. The net loss also included the write-off of the Buffalo Valley mining property totaling $2,308,076 as a result of Horizon's decision to relinquish its interest in the property and also the write-off of the Tuscarora Gold Mines property totaling $3,101,049.
 The potash business was the only active income-generating operation of Horizon. Since the cessation of operations of the potash subsidiary, Horizon has defaulted on substantially all of its debt. Horizon has been engaged in discussions with all its lenders regarding restructuring of its indebtedness and has been seeking purchasers for its assets. On June 25, 1993, an order was entered by the Fifth Judicial District Court for the State of New Mexico, appointing a receiver to take and maintain possession of the equipment of the potash subsidiary, primarily for the purpose of protecting the equipment on behalf of the lender holding first lien on the equipment to collateralize a loan to the potash subsidiary. Horizon's only current activities relate to the management of the potash subsidiary's assets and liabilities and of the company's Gold properties.
 Horizon continues to believe that its Dixie Comstock and Mt. Chase properties have potential to become viable producing mineral properties. However, development of these properties is dependent on significant third party funding. While Horizon is currently focused primarily on disposing of the potash business and restructuring its debt, Horizon is also exploring possible alternatives that could enable it to benefit from its ownership interests in these properties. However, based on Horizon's current unfavorable financial circumstances, there can be no assurance that Horizon will be successful in continuing in business or in being able to realize value from its mining interests at Dixie Comstock and Mt. Chase.
 Consolidated Balance Sheets
 March 31, March 31,
 1993 1992
 Current assets:
 Cash and equivalents $14,124 $766,339
 Receivables 77,240 1,086,473
 Inventories 7,023 6,818,825
 Assets of discontinued
 potash operation 10,186,507 ---
 Other current assets 82,375 644,651
 Total current assets 10,367,269 9,316,288
 Plant and equipment, net 52,310 3,255,490
 Producing mining
 property, net --- 2,433,232
 Nonproducing properties 4,085,186 6,055,781
 Producing mining property,
 plant and equipment with
 operations suspended --- 2,169,436
 Mining properties, plant and
 equipment held for sale 283,892 3,334,651
 Other assets 434,285 749,009
 Total $15,222,942 $27,313,887
 Current liabilities:
 Notes payable and current
 maturities of long-term
 obligations $9,100,674 $4,279,225
 Current maturities of
 subordinated convertible
 debentures 8,057,477 ---
 Accounts payable and
 accrued liabilities 4,780,596 3,641,391
 Reserve for costs of
 potash operation 2,400,000 ---
 Total current
 liabilities 24,338,747 7,920,616
 Long-term notes payable 1,599,152 4,166,916
 Reserve for reclamation 5,950,000 1,374,463
 Subordinated convertible
 debentures --- 7,597,509
 Stockholders' equity (deficit):
 Preferred stock 2,328 ---
 Common stock 315,891 314,859
 Additional paid-in
 capital 24,071,081 21,763,109
 Accumulated deficit (40,812,653) (15,581,981)
 Total (16,423,353) 6,495,987
 Less treasury stock (241,604) (241,604)
 Total stockholders'
 equity (deficit) (16,664,957) 6,254,383
 Total $15,222,942 $27,313,887
 Consolidated Statements of Operations
 Years Ended March 31,
 1993 1992 1991
 Potash operations:
 Revenues $32,341,403 $4,394,380 ---
 Operating costs
 and expenses:
 Cost of sales 29,374,175 3,668,349 ---
 Royalties 1,828,542 131,661 ---
 Selling 960,366 71,845 ---
 Gross operating margin 178,320 522,525 ---
 Precious metals
 Revenues --- --- 3,582,587
 Operating costs and expenses:
 Cost of sales --- --- 3,049,779
 Reserve for
 shutdown costs --- 380,000 890,000
 Writedowns of inventory --- --- 818,293
 Royalties --- --- 159,310
 Gross operating
 margin (deficit) --- 380,000 (1,334,795)
 Total gross operating
 margin (deficit) 178,320 142,525 (1,334,795)
 Other operating costs
 and expenses:
 General and
 administrative 1,135,415 1,158,661 1,246,965
 Exploration 63,819 121,474 933,937
 Provision for
 reclamation costs 4,575,537 --- ---
 Royalties and rentals,
 nonproducing properties 113,137 127,438 213,549
 Reserves for potash
 mining operation 4,737,778 --- ---
 Writedowns of
 Tuscarora property
 held for sale 3,101,049 4,700,000 500,000
 Writedowns of Buffalo
 Valley property 2,308,075 1,000,000 ---
 Writedowns and
 abandonments of
 properties 2,191,869 64,796 143,751
 Writedowns of mining
 equipment held for sale 184,123 196,000 288,000
 Loss from operations (18,232,482) (7,225,844) (4,660,997)
 Interest (expense), net (3,079,811) (857,746) (235,338)
 Financing cost (3,950,857) (629,347) ---
 Foreign exchange
 gain (loss), net (26,298) 262,189 171,103
 Miscellaneous income
 (expense), net 58,776 (30,242) (33,739)
 Loss before income taxes
 and minority interest (25,230,672) (8,480,990) (4,758,971)
 Provision for income taxes --- --- 40,000
 Loss before minority
 interest (25,230,672) (8,480,990) (4,798,971)
 Minority interest --- 722,615 431,186
 Loss before
 extraordinary credit (25,230,672) (7,758,375) (4,367,785)
 Extraordinary credit:
 Gain on extinguishment
 of debt --- --- 244,139
 Net loss ($25,230,672) ($7,758,375)($4,123,646)
 Net loss per share:
 Before extraordinary
 credit ($6.40) ($2.24) ($1.28)
 Extraordinary credit --- --- 0.08
 Net loss ($6.40) ($2.24) ($1.20)
 Number of common shares
 for computing
 per share data 3,942,471 3,484,625 3,364,841
 -0- 9/10/93
 /CONTACT: John E. Watson, chairman, Horizon Resources, 303-239-8701/

CO: Horizon Resources Corp. ST: Colorado IN: MNG SU: ERN

LM-MF -- LA022 -- 0974 09/10/93 19:55 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 10, 1993

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters